Connecticut Sues Kalshi in Escalating Battle Over Sports Prediction Markets

Connecticut has filed a lawsuit against prediction market platform Kalshi, seeking a court injunction to stop the company from offering sports-related event contracts within the state. Attorney General William Tong argued that these contracts function no differently than traditional sports betting and shouldn’t be shielded from Connecticut’s consumer protection laws simply because they operate under federal oversight.

Governor Ned Lamont added that the platform poses risks to consumers and young people, saying the state’s original goal in legalizing sports wagering back in 2021 was to build a responsibly regulated market, not an unrestricted one.

Kalshi Pushes Back on “Inconsistent” Enforcement

Kalshi’s head of litigation, Jovy Dedaj, responded that Connecticut’s action reflects arbitrary enforcement, noting that other prediction market platforms continue operating in the state without similar legal pressure. Dedaj argued this inconsistency strengthens the case for federal, rather than state-level, oversight of these markets.

A Legal Fight That’s Been Building for Months

This lawsuit is the latest chapter in an ongoing dispute between Connecticut and Kalshi. Back in December, state regulators ordered Kalshi, along with Robinhood and Crypto.com, to stop offering sports event contracts. Kalshi responded with its own lawsuit, arguing its markets qualify as regulated derivatives under Commodity Futures Trading Commission oversight rather than state gambling law. A federal judge denied Kalshi’s request to block state enforcement earlier this month, and the company has since appealed that ruling.

Part of a Broader National Pattern

Connecticut joins more than a dozen states that have taken legal action against Kalshi over similar sports-related contracts. Washington state recently ordered the platform to halt a range of prediction markets entirely, while Baltimore filed its own lawsuit against Kalshi and competitor Polymarket over comparable concerns.